Group of Property-Casualty Insurers Saw Net Income Double in 2021

Publicly traded US property-casualty insurers' net income more than doubled in 2021 to $133.9 billion despite weather-related catastrophes, volatile investment markets, and the ongoing economic fallout from the COVID-19 pandemic, according to A.M. Best.

In a new report, "Despite Near-Record Catastrophe Losses, U.S. Property/Casualty Insurers Post Strong Gains," Best said that publicly traded US property-casualty insurers posted gains in all major revenue and income measures.

"These gains more than offset the second-worst year ever in terms of billion-dollar weather and climate disasters," a Best statement said.

The rating agency noted that a 4.0 percentage point increase in the group of property-casualty insurers' loss ratio does present a concern.

"The benefit of fewer drivers on US roadways at the height of the pandemic was offset by reports of drivers traveling at higher average speeds—the reason for the rise in the fatality rate, which showed no signs of abating in 2021," Christopher Graham, senior industry analyst, industry research and analytics, at A.M. Best, said in the statement.

The report said that property-casualty insurers' natural catastrophe losses approached $100 billion in 2021. Those losses contributed to a median combined ratio among the publicly traded insurers of 97.4 percent, according to Best.

The group's premium revenue increased 10 percent in 2021, following a 2.9 percent increase in 2020, the lowest in several years, according to the rating agency. Best said the 2021 premium increase could be attributed to insurers taking steps to improve rate adequacy for coverage lines that have been producing unfavorable results such as general liability, professional liability, commercial auto, and catastrophe-exposed property.

Overall property-casualty revenue increased 19.7 percent in 2021 to $711.1 billion, Best said.